Understanding Environmental Regulations

The U.S. Environmental Protection Agency (EPA) and other environmental agencies levy a number of environmental regulations that apply to all businesses, regardless of size. You need to be aware of the law if your business practices involve the release pollutants into the air, water, land or sewers, or if it involves transmitting, storing or the disposal of hazardous waste.

The Business and Environment Connection

It’s critical that you fully understand how your business impacts the environment and that you’re complying with environmental laws. Failure to comply can lead to court appearances, penalties and lawsuits. Even employees can end up being prosecuted for offenses that are committed by the company.

Claiming ignorance of the law won’t protect you, your company or your employees. You should fully understand federal and state environmental laws.

Managing Hazardous Waste

The Resource Conservation and Recovery Act permits are sanctioned by states, counties and EPA Regional Offices to ensure the safe storage, treatment and disposal of hazardous materials. Here’s the link to Arizona’s website.

Some of the most common hazardous wastes include medical waste, like blood and syringes and other waste such as paint, solvents and oil. In addition, the EPA provides a comprehensive list of hazardous waste along with the proper way to dispose of it.

The regulations that apply to your business will depend on the amount of waste you produce each month. Typically the laws require that businesses take care of any hazardous waste that they generate and that they store the applicable waste in safeguarded drum containers.

You can’t accumulate over more than 2,200 pounds of hazardous waste on your property at any time. Additionally, you must hire a licensed waste hauler to transfer the hazardous waste to a facility that’s permitted to receive and dispose of the waste.

Air Pollution Management

The Clean Air Act was designed to reduce air pollution. Any business that emits impurities into the air, including dust, smoke, odors, gases, volatile organic compounds as well as solid particles is subject to the law.

Generally, you’ll need permits that require you to disclose the type and quantity of pollutants you’re releasing as well as the steps being taken to minimize the pollutants. You’ll also need to be able to provide information on how you measure, track and document the pollutants your business emits.

In some cases, a permit may not be required. Especially, if the quantity and form of pollutant emissions fall under a minimum threshold.

Wetlands Protection

Wetland habitats include bogs, marshes and swamps and are commonly located in flood plains and alongside waterways. If your business is located near or in a wetland area, you may be required to obtain permits from local, state and federal government agencies, especially if the business discharges any form of pollutant near a wetland area. The U.S. Fish and Wildlife service provides an interactive map that details the location of wetlands across the United States.

While environmental regulations and concerns might not have a direct impact on your business, they may effect on your clients and vendors. It’s important for you to consider how these regulations may affect not only your bottom line, but your supply chain as well.

Make sure you have contingency plans in place so that your business doesn’t come to a halt. Even the smallest of businesses need to comply with environmental regulations. What you don’t know will hurt you. There are no exceptions.

How to Eliminate Profanity in Your Business

From printer jams to project misses, there are times when we all reach the breaking point. It’s easy to resort to cursing in the moment of frustration. Unfortunately, profanity often leads to a reduction in productivity and decreased employee morale. The best companies work hard to eliminate profanity in the workplace.

It’s All About Perception

Profanity influences how investors, managers and other business leaders view not only the employees, but also the workplace as a whole. It gives the impression that the workplace may be hostile or that the business owners and managers don’t care.

Business owners who can’t control their own language or their employee’s language can end up losing key players, capital investment and strategic deals. Even if it’s a rare occurrence, turning a blind eye can lead to harassment lawsuits especially if the person using profanity is in an influential position.

Responding to Profanity in the Workplace

As a business owner, you need to carefully consider how you respond to profanity in your workplace. First, look inward to assess your own language. Do you set a positive example for others to follow? If not, consider working on adjusting your language.

If profanity comes from a specific business unit, try to identify if there’s something about the team or their tasks that cause it. If you can isolate the problem to a specific individual or stressful situation, you have a better chance of eliminating the problem.

Be strategic in your approach and get an outside perspective or talk to someone who has expertise in human resources. Coming down too hard on personnel can result in legal issues. In some cases, you may find yourself dealing with cursing employees who claim that they’re engaging in activity that’s protected by the first amendment or the National Labor Relations Act. As shocking as it seems, you wouldn’t be the first business owner to hear that excuse. You must take steps to protect your business.

Protect Yourself

Make sure that you have a section in your employee handbook that specifically addresses profanity, along with discrimination and sexual harassment. Then create and enforce a zero tolerance policy and provide training for help for those who need it. It will take effort. But if you enforce your stance on profanity, you’ll eliminate it over time.

Hire For Fit

Before hiring someone, consider candidates that have a professional demeanor. This may mean that you pass on the most qualified applicant. You want someone who will represent your business in the best possible light. Hiring someone who’s not a fit can cost your company more in the long run.

What you don’t know can hurt you. At the end of the day, there’s no room for offensive language in your business. Although it’s common to let our temper get the best of us, the key is to not make it a habit. Words are powerful. Don’t let them ruin what you worked so hard to build.

Market to Target

How to Market to Your Target Audience

Market to TargetHaving a narrow focus on your target audience is critical to the success of your business whether you sell cars or essential oils, have an e-commerce website or manage a local retail store. Having a strong sense of your customer base will help you create marketing messages that help them solve their problems with your products and services.

To market to your target audience you must first identify them, create an avatar to represent them, find out where they hang out, observe them and then create a plan.

Identify Your Target Market

When you market to everyone, you market to no one. Not every customer in the marketplace needs your products and services and marketing to people who aren’t interested costs time and money.

The easiest way to identify your target market is to start with demographics, such as age, gender, ethnicity, income, and location. You can find this information through a variety of sources like the American Fact Finder created by the Census Bureau.

Create an Avatar of an Ideal Customer

Once you understand your target market, you might find it useful to create an avatar. Like target market personas, an avatar has characteristics of your target market. The difference is that your avatar is a fictional character that you can picture as you write your messages.

When you’re creating messaging or offers, think about your avatar before you hit send. Make sure he or she would want to read that blog post, email or social media message.

Determine Where They Go For Help

Find out where your customers go to get help for a problem that your product or service solves for. They might ask friends for help in a special group on Facebook, search online, attend an event or ask a professional.

After identifying the source of their information, work to be in the top position for the answer. You can do this through search engine optimization of your website and content, making friends with professionals that likely refer people to businesses like yours or reaching out to people at an event.

Don’t go to conferences and events to learn. Go to network and make connections. If you’re a web developer, attend a marketing conference. There are plenty of people who are hungry for web development help there. If you need to brush up on your skills, attend a web developer conference, but search for partners rather than clients there.

Observation does the trick

Once you know where your target audiences go for help and understand the channel fully, you should sit back and observe how they interact. Take a close look at your target audience’s likes and dislikes. What do they comment on? What do they share? Do they welcome new businesses or automatically blacklist them?

After you’ve spent some time observing their interactions, it’s time to engage. Start by responding to questions with helpful answers and be careful not to pitch your business right off the bat. Just like dating, you don’t want to offend someone before they get to know you.

Create a plan

Develop a marketing plan based on your observations, preferences and budget. Then implement it in the channels that your target market engages with to achieve the maximum return on your investment.

Need help getting started? I can help you set a solid foundation for your business’ success. Call me today.

Delegate and Let Go – Overcoming Micromanaging Tendencies

Your job as a small business owner is to set the vision and course for your business, while ensuring the day-to-day

 

operations continue as planned. A strategic plan that sets out your goals, objectives, and timelines is necessary in order for you to gauge where your business is and where it needs to go. The steps in-between let you know if you are making appropriate progress or if you need to pivot. When you’re micromanaging, you’re not focused on the things that move the needle in your business. In order to focus on the future, you must delegate and let go. 

Start Small

Letting go of the reins can seem a bit overwhelming at first. After all, your business is the baby that you’ve raised from birth. Now that it’s time to graduate to the next level, letting others take on portions of your responsibility is like sending your first born off to college. It may help to start small and delegate smaller tasks first if you’re not used to letting go. This will prevent your employees from being overwhelmed with a lot of new tasks and will help you loosen the reigns while still setting the course. As employees display the ability to do the task that you delegated, move on to the delegation of larger projects.

Ask, Don’t Tell

After you’ve trained your employees, try not to nag them about how they’re performing the task. If you find an error, ask questions to see if they can find the error on their own. Then coach them and come to a joint decision as to how this task will be completed to avoid errors in the future. What works for you may not work for someone else. Everyone has their unique way of doing things, and their way may work better for them. If employees are ethical, getting results and meeting deadlines, then let them be.

Don’t Sweat the Small Stuff

Let employees have creative freedom and empower them to make decisions. You may be surprised to discover that this can foster loyalty and pride in their work. They may feel more empowered to provide new solutions and efficient methods of performing their role, which may free them up for additional tasks.

Don’t forget that everyone makes mistakes sometimes. Use errors as learning and coaching opportunities to help build a strong and healthy working relationship that is beneficial to everyone involved.

Perform an Exit Interview

Any time an employee says they are leaving the company, ask them why. This can provide insight into issues that you’re unaware of. Perhaps your wages don’t compare to the same positions in other companies. Maybe they believe that the job is too difficult and that processes need to be improved. Perhaps the culture or environment that they’re working in is causing anxiety. Listen to what they’re saying. Then, ask other employees for their feedback and input into the stated issues so that you can improve the work environment.

It may be necessary to offer further training on job roles or teach a class on working with others and accepting differences in culture, sexuality or race. If you need advice to correct issues consider hiring a coach, mentor, or consultant to help you through the process.

As your business grows, you can’t be everywhere doing everything. Your job is to set the vision and direction while ensuring the smooth operation of your business. Don’t become a micromanager. If you are one, consider implementing a few of these tips to create a better working environment and a better business outcome. I can help you streamline your business processes. Call me today.

Get the Right People On-board and Contributing

As your business grows, you’ll need to hire others to work for you and delegate tasks according to their skills, abilities and job description. Get the right people on-board and contributing as fast as possible. Creating a culture where you have high performing individuals is key to improving the trajectory of your success. 

Teamwork - a group of eight business people assembling a jigsaw puzzle - representing team support and help concepts

Hire the Right People

Job descriptions are important and should accurately depict what it is that the employee is required to do on a day-to-day basis. If a candidate is hired believing they are going to be a data entry clerk, but you have them sweeping the floor all day long, they’ll be looking for another job sooner than you think.

Before you start the hiring process, I recommend that you first create a Position Contract and then a task list. Indeed.com has information available online to help business owners create job descriptions and determine the reasonable rate of pay for the position based on duties, experience and education. Also, the Bureau of Labor provides the same information. Payscale.com is another very good resource, especially if someone moves from another state as the pay and cost of living may be similar or very different.

Before you hire a candidate, make sure their vision and values match those of your company. Hiring the right people the first time can help ensure the right fit for the job. Evaluate whether they have the right skills to do the job through education or experience. Our firm has a variety of temperament and skill evaluation tests that will save you the cost and hassle of hiring the wrong candidate.

Discuss the mission, vision, and values of your business during the interview. Candidates who don’t demonstrate the same values as your business will bring their own. You may not want their values polluting your workplace. If they don’t share many of the same values, they may not be a good fit.

Don’t forget to check the candidate’s references and ask about performance. You can also use a social media network like LinkedIn to see if they have recommendations from supervisors and peers.

Train employees

Start with your onboarding process with culture. Discuss the mission, vision, and values of your business during orientation. Let employees know how their role helps to contribute to the company’s overall mission and goals so they will know that their role is vital and important to the business.

When you hired your employee, they came with education or experience that indicated they were suitable for the position. This doesn’t mean that they know the job requirements. Provide on the job training to ensure they have all the required knowledge and tools to do the job that you hired them for. Every company does business differently, and it is unfair to throw someone into a position and expect them to do things your way.

Have regular training sessions on new and improved methods. Send employees to classes and seminars that focus on both the strengths of the employees while providing them with ways to do their jobs more effectively. This can be learning a new conflict resolution process, data entry method or customer service improvement. Employees who learn new ways of doing things and who feel they are able to come to you with new ways of doing things will be happier in their positions.

Assess Employees

Small business owners rarely give quarterly, semi-annual or annual reviews and evaluations to their employees. To simplify this I recommend a two-step solution:

  1. Have a one-on-one meeting with employees each week or every two weeks. It should only be 15-20 minutes long and gives the employee and employer an opportunity to discuss past issues, problems and concerns. You can also discuss the present and future weeks goals.
  2. Perform no less than semi-annual employee evaluations. The one-on-one meetings should make the semi-annual evacuations shorter and less complicated because day-to-day matters have already been addressed and resolved.

Consider if your employees are adding value to your business by either freeing up your time or improving your brand reputation. Are they assets or liabilities? Always think about whether or not employees are adding revenue to your business.

Fire Underperformers

If you have made sure your processes and procedures allow for a certain level of performance by each and every employee, yet you find that one employee who can never seem to perform, then it’s time to have a conversation. Treat them with respect by asking questions to determine why they are underperforming and provide coaching, peer mentorship or additional training to get them back on track.

Employees who are motivated to continue their employment will improve their performance after coaching or retraining. However, there are employees in the world who just want to do as little as possible. People who underperform require their peers to pick up the slack. Underperformers often will bring morale down by complaining and criticizing. This is bad for company culture and morale and is a drain on company resources both financially as well as in the production capabilities of those around them. If the employee has been trained, coached and retrained and is still underperforming, it’s time to let them go.

After you’ve hired and trained your team, it’s time to let them do their jobs. Increase your return on investment by delegating and learning to let go. In the third and final article in this series, I’ll share exactly how to do that.

10 Ways to Tell if You’re Micromanaging Your Team

Everyone wants their business to succeed, and every business owner knows they can handle all the tasks associated with the job Conceptual illustration. Business man controlling other business man like a puppet on a string.in a capable and efficient manner. But, is that the best use of your time? Worrying about whether tasks will be done on time or correctly may lead you to believe that staying on top of things means frequently checking in with employees. This does not always lead to success and can, in fact, create the exact opposite effect.

What is Micromanaging?

Micromanaging is controlling every part of a task. It’s checking in incessantly with employees to make sure they’re performing the job exactly as you would. Multiple email reminders, questions regarding progress or frequent trips to employee desks all classify as micromanaging.

While it is understandable that you want the task done quickly and efficiently, micromanaging generally impedes progress by reducing employee confidence in their abilities, creating undo stress and fear. It may also leave them with an impression that you don’t feel like they are capable of doing the job. This can cause a high turnover in employees, increases stress, and can cause anxiety that impedes with your employees’ work and personal life. It’s counterproductive and it hurts your business.

How to Identify if You’re Micromanaging

If you’re not sure if you’re micromanaging, take a moment to reflect. Here are 10 clues that may help you determine if you are:

1. Employees ask you basic questions that leave you wondering why they didn’t just answer it for themselves.

When an employee is well trained yet still comes to you for the smallest answer, this generally indicates that they don’t feel comfortable making decisions. They may have the impression that you don’t trust them enough. Fearing that they’ll make a wrong decision and lose their job drives them to seek constant approval before they begin a task or at various stages throughout the process.

2. Employees copy you on every email.

This red flag usually indicates that employees are trying to show you that they are working hard. They want you to be aware of every minor detail of the process because they believe you want to be involved at this level. They are trying to get the information to you before you ask them for it in an attempt to reduce your need to constantly look over their shoulder or ask for frequent updates. Since you chronically check in at every step of the process, they assume that they are saving you time by copying you on everything under the sun.

3. Employees rush to the exits at 5PM.

Employees who start to pack it up 15 minutes before the end of their shift, start becoming agitated in their movements or behaviors, start speaking quickly, or glance at the clock every 2 minutes can’t wait to leave. While almost every employee is happy to see the end of their shift, anxiety and agitation, hyperactivity, or nervous behavior near the end of a shift indicates that your employee is stressed in their job and can’t wait to vacate. This does not bode well for employee retention.

4. Your turnover rate is higher than your competitors.

You offer a decent wage and benefits package, your office equipment is efficient and comfortable to use and you have a great social committee on site to encourage community within your organization. You feel like you have it all, but you can’t figure out why you’re constantly replacing employees.

If your employee turnover is higher than the average for your industry, you may be micromanaging. No matter what you offer as competitive wage and benefits, no one is going to stick around in an environment where they feel like they are being watched by the Secret Service. Work-related stress and anxiety are responsible for many illnesses and problems in people’s personal lives; they’ll only take so much of it before they move on.

5. You spend a lot of time reworking other people’s work.

Constantly reworking the work of others when they’ve completed the task makes employees feel like you’re impossible to satisfy. Is there something legitimately wrong? Is there an incorrect calculation, missing data, or is the font of the document in Wingdings and illegible? If not, then you’re probably fixing things that don’t need to be fixed. There’s a difference between fixing a legitimate error and being picky because you’re micromanaging.

6. You feel a sense of pride when correcting others.

Do you get excited and feel pride when pointing out an error that an employee made? Error correction should be used as a tool for further training. If it’s a rare occurrence, ask the employee to correct it and let it be. If an employee makes repeated errors, there may be a training issue. One way or the other, enjoyment from correcting errors isn’t going to win you loyal employees who strive to do their best.

7. You spend all of your time in meetings and then tell people what to do instead of sending them to the meeting.

If your employees have the qualifications necessary for you to hire them, then they’re likely able to attend meetings related to their job. While it may be necessary for you to attend the meeting anyway, you shouldn’t rehash the entire thing again. If something is unclear during a meeting, ask a clarifying question so that your employees can hear the answer. Otherwise, trust employees to attend meetings related to their job.

8. You do most of the work.

Do you stay up late at night completing projects and tasks that your employees are capable of doing? If you find yourself doing most of the work, you’re probably a micromanager.

9. You ask for frequent updates when once per week would be fine.

Constantly asking for updates distracts people from completing their task and makes them feel like you don’t trust them. This can cause delays that are significant enough to cause employees to miss their deadlines. Look at a task and set a realistic schedule for updates. Tell employees to inform you right away if anything affects the deadline. Otherwise, wait for the update you scheduled.

10. You’re always wondering where your employees are and if they’re working.

If you’ve set realistic timelines and goals for tasks and they’re completed on time, then your employees are doing their jobs. It’s perfectly fine to run a report to check quality and quantity of tasks completed by your employee on a weekly or monthly basis. If the numbers start to dramatically change for an employee, then ask if there’s an issue causing the change. Is a piece of equipment broken? Is the employee feeling under the weather? Was your original expectation too high and unattainable over the long run? Evaluate the process to see if it’s working, then ask why an employee’s production has dropped. If targets are being met on a regular basis, stop worrying about if your employees are working.

Once you’ve determined that you’re a micromanager or have micromanagement tendencies, the next step is to delegate. In my next post, I’ll share tips on how to get the right people onboard and contributing to the bottom line by hiring, training and firing according to your culture.

Running an Ethically Conscious Small Business

Social media has made transparency even more prevalent for businesses all over the world. Ethically Conscious Small BusinessIt’s more important than ever to run an ethically conscious small business because all it takes is one mistake to make a bad first impression. Before you know it, millions of people are reading or watching your blunder online causing you to shut the doors to your dreams.

You may believe that everything you do is ethical especially because you have good intentions. However, you may not be taking the time to pause and think about the ethical ramifications of your business decisions. Quick decisions that aren’t thought through can often leave you paying for things you failed to consider.

Unknowingly Unethical

Imagine that your company is hanging on by a thread. An important potential client is coming to visit your company, which could significantly raise your sales and profit margins and take you from a fledgling company to the top of the mountain of success. You want to appear that you are in demand so this potential client has faith that you are the right person to take on their portfolio.

Prior to the client’s visit, you ask friends and family to call your office to make it look like you are receiving a higher number of business calls than you actually are. You hire a staging company to fill your space with luxury furniture and hide all of the second hand furniture in storage. Your client arrives, sees a thriving business and signs on with your company. You’ve achieved what you set out to, but were your actions ethical?

What happens if that new client decides to visit unannounced to see how things are going? Where is that fancy furniture now? Is your company spiraling out of control and going down the toilet? Did you lie to him? Should he be worried about his faith in you and what you have to offer?

There is nothing wrong with being a company that’s working hard at succeeding. Instead of staging a scene for a play, the best option would have been to display your authentic culture and areas of success instead of providing a showroom of nice stuff you are just going to return.

Making decisions such as the ones in the example above may seem harmless overall because you know that you can handle the work so the client won’t be disappointed. However, misleading anyone about the level of your success is not an ethical way to gain a long term and stable business relationship with your customers.

Every step you make along the way in building the foundation of your business should be done ethically building a rock solid foundation for your business to stand on and for your employees to believe in. An unethical decision here and there may not seem to be that big of a deal, but one small crack leads to employee distrust, customer disappointment and major damage repair.

You want to be proud of what you’ve accomplished and not have to worry that at any time your world could come crumbling down around you. Having a foundation with the cornerstones built on unethical behavior is guaranteed to fall down over time. It may not be today. It may not be tomorrow, but at some point, your decisions are going to be brought forth into the spotlight.

Be an Ethically Conscious Small Business

Making the right decisions allows you to stand proud and firm in the knowledge that whether you succeed or fail you’ve done so on your own merit. You want all of your employees, customers and business connections to take comfort in the knowledge that you are a stand up company who lives by ethical practice standards and will not embarrass them. Not only do you have your own business and reputation to worry about, every employee, client, and business associate you currently have or will make in the future can be put in the negative spotlight and have their businesses negatively affected based on your decisions.

While making an ethical decision may not always put you on the fast track to success, any success you achieve will be a legitimate and true display of how fabulous your company actually is and not a false projection ready to topple at the first bump in the road. Take time to consider all possible ramifications of the decisions you make in your day-to-day business practices. Ask yourself, “Would I be proud of my actions if they were to be displayed on every social media channel in the world?” before you make the final call.

Remain truthful to yourself, your company and your customers. Only with ethical business practices can you be sure your company will stand up when it is closely scrutinized and not suffer a widespread, public, and humiliating bashing that destroys all you’ve worked so hard to attain. The ethics of success are simple, be true to yourself, be true to the vision you have to your company and be true to the people who make your business what it is.

Free Bonus E-book

This month I released my latest e-book for Arizona contractors. If you’re frustrated with the cash flow issues in your contracting business, click here to download this resource for free. I’m here to help your business thrive. Contact me today if you’re ready to take your business to the next level.

The Many Hats of Small Business Success

If you think that you only have to do what you’re good at, think again. Small business owners don’t have the luxury of sticking with one title.many hats They wear many hats. In addition to the CEO, you may have the office manager, accountant, videographer, marketer, cook and janitor title. If you want to spend the next year working on your business instead of in it considering following this advice and wear the right hat at the right time.

  1. Identify the responsibilities of each hat that you’re wearing and set specific goals for that role. Then, track your progress towards the goal throughout the year and assess whether or not you’re headed in the right direction or need additional help.
  2. If you need additional help, consider hiring or outsourcing the role in its entirety. It may be tempting to outsource only one piece of the role, but doing so is likely to cause more problems than resolve them. Giving one person responsibility and accountability for the role empowers them to own all aspects of it, reduces confusion and miscommunication.
  3. Once you assign responsibility to someone on your team, move to a mentoring role instead of a micromanaging role. Empower them to do more by giving them freedom to make decisions within the guidelines that you set up.
  4. Create a culture of open and real communication so that employees or freelancers know they can come to you when they see something that may end up hurting your business and ultimately impacting their job. Over time, you’ll find yourself with a capable, highly functioning workforce and one less hat to wear.

Regardless of the fires that are burning today, make sure to always make time to put your CEO hat on so that you can focus on leading your company. Hours often get consumed by the operations of today and strategic planning gets the left overs or nothing at all. Reverse that mentality so that you can plan for the future and wear the hat of success.

If you’re looking to get more efficient in your business next year, I can help you implement systems and processes that maximize your time and your employees time. Contact me to get started today.

 

When to Stop Outsourcing and Hire Instead

In my last post I shared the pros and cons of outsourcing. But how do you know when to stop outsourcing and hire instead? Small business owners who are on the path to success know that they can’t do everything by themselves. Hiring employees could mean the difference between stagnation and growth. The three reasons why you should consider hiring an employee instead of outsourcing are below.stop outsourcing

Priority

When you outsource your work to a contractor or freelancer, you end up competing against other clients for their time. Something that you need done right away could end up taking weeks if the contractor has other projects ahead of yours.

On the other hand, employees are committed to your company for the time that you’re paying them. You manage their priorities as it relates to their work assignments. Your highest priority work will be done in the order that you see fit.

Quality

Small business owners generally compete on quality more than they compete on price. Therefore, outsourcing to a contractor can be risky. Contractors don’t have a stake in your business and are often looking to complete the job as quickly and efficiently as possible. They may also provide lower quality workmanship if they believe that you’re not going to extend the contract term.

As you consider hiring employees, it’s important to understand the tasks that they’ll be responsible for. Assess their ability to complete the tasks in an efficient way and maintain the level of quality that your customers are used to.

Security

Outsourcing sometimes puts your company at risk, especially if you need to provide classified or sensitive items to the contractor as part of the project. Although it’s easy to forget, information is still stored somewhere in the brain and you don’t want the contractor to recall your sensitive information when they’re working for your competitor.

Stop Outsourcing

You should have enough work to keep your employees busy for the hours you’re your paying them. Otherwise, they’ll become complacent and may end up using work time to run personal errands, come in late or leave early.

Giving employees meaningful work that keeps them busy is not only rewarding for you, but it provides the sense of contribution to the success of your business. It gives them a chance to celebrate the wins and at the same time feel confident in their own abilities to accomplish great things.

Changes in GAAP for Small Business

Most people consider the act of keeping the books balanced to be relatively straightforward for the average small business.gaap As such, any decent accounting system tends to work well in a small business setting initially as long as you keep it current and accurate. However, as your business expands you’ll need to build generally accepted accounting principles (GAAP) compliant financial statements so that your statements can be compared to other companies. This will help creditors and investors as they review your company for potential funding opportunities. There are definite pros and cons to weigh as you determine if you’ll move towards a GAAP based system, all of which you need to be aware of before taking your small business to the next level.

When expanding your business, you may require funding from investors, many of whom will want to compare your financials with that of similar businesses. GAAP-compliant financial statements make comparisons easier. The comparison of your statements with others in your industry is known as benchmarking and is effective at helping you and investors measure your performance. Using GAAP means having a consistent accounting process in place that makes it easier to see how you’re performing over time and how viable your business is.

If you’re looking to grow and become a public company, you’ll need to move to GAAP-based financials. You should begin to plan a transition to GAAP as soon as you’ve made a decision to go public. Making the switch now will allow you to have a solid financial statement process in place and make your expansion that much smoother.

If you are just getting ready to start a business and are trying to decide on an accounting system, you should look at going the GAAP-based route right from the start. Implementing GAAP immediately means spending a little more money and time now, but will save you significantly over the long run. If you decide to wait until it comes time to expand before making the switch you’ll have to bring all of your past accounting details into the picture in addition to moving towards GAAP-based financial statements.

Changes to GAAP

If you use GAAP-based financials you’ll be affected by upcoming changes. The International Accounting Standards Board is planning on converging GAAP with International Financial Reporting Standards, which impacts revenue recognition, leases and financial instruments. These are the most significant changes made in decades. While the current GAAP standards are rule-based, the converged standards will be principle-based. This means more professional judgment and interpretation are necessary. These changes are likely to go into effect starting some time in 2016.

The best way to decide on what’s best for your company is to look at where you want to take it in the future. If you plan on keeping things small, you may be better served with your existing accounting system. If your dream is to expand the business over time, move to GAAP now but meet with an expert to determine how you should best prepare for these changes. If you have any questions about how to move to a GAAP-based system let me know. I’d be happy to help.